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Pharmaceutical companies in India have had a hold on the biotechnology sector for many years, and they're not about to let the follow-on biologics market pass them by.
It's boom time for the Indian biotechnology sector, which has grown more than 30% during the past five years and is expected to be worth $20–$25 billion in revenue by 2015, according to industry estimates and market research reports. Behind the boom stands global pressure to lower healthcare costs. Governments far and wide—including in India—are trying to facilitate the entry of less expensive, generic biotechnology or protein-derived drugs, also known as follow-on biologics, biosimilars, or biogenerics.
"Biogenerics represent a major future opportunity in economic terms for India and, more importantly, for products at reasonable costs, because an unprecedented number of blockbuster drugs are going off patent,'' says Rajesh Jain, joint managing director of the biopharmaceutical firm Panacea Biotech (New Delhi).
An estimated $25 billion worth of innovator biologics are set to lose patent protection by 2016, according to a report on "The Top 10 Biosimilar Players" in Business Insights that notes IMS estimates, and large Indian biotechnology firms are anxiously awaiting the opportunity to develop follow-on versions. Vaccines are, of course, a major part of this particular sector. The country's vaccine sector is growing at a rate of 25–30% per year, and is projected to reach more than $1 billion in sales by 2012, according to Navroz Mahudawala, director of Ernst & Young's health sciences practice.
Domestic firms seek a piece of the action
Deals to secure a share of the follow-on biologic marketplace are coming in thick and fast. On Sept. 7, 2009, Cipla (Mumbai) entered into a 50–50 joint venture with Chinese pharmaceutical company Zheijang Aotuokang for the manufacture of follow-on biologics. The new venture will focus on an arthritis product based on a Johnson & Johnson (New Brunswick, NJ) innovator drug and a cancer treatment drug. The joint venture is to be called Biomab, and Cipla expects the initial product to be out by the first quarter of 2010.
Biotechnology firm Avesthagen (Bangalore) has developed several follow-on biologics and has four molecules ready for clinical trials. The firm is not yet listed on the Indian stock market but is preparing for its initial public offer (IPO). "Many people are interested in our molecules and products,'' says Villoo Morawala-Patell, chairman of Avesthagen, which expects to reach a turnover of $20 million from R&D and the sale of nutritional products. The company holds 560 patents and expects to license some of its plant-derived nutritional and therapeutic molecules and ingredients by the end of 2009.
Biocon (Bangalore) executed a definitive agreement with Mylan (Pittsburg, PA) in June 2009 for an exclusive collaboration on the development, manufacture, and commercialization of multiple, high-value generic biologic compounds for the global marketplace. "The complexity and costs involved in developing generic biologics are expected to see only a few players being able to gain entry into the highly regulated markets of Europe and USA,'' says Chairman Kiran Mazumdar-Shaw, adding that the deal with Mylan would "accelerate our work in generic biologics and take it to the next level around the world.''
Despite World Trade Organization membership and recent improvements in compliance with international regulatory and intellectual property laws, there remains no formal regulatory framework for follow-on biologics in India or China. "The market is highly fragmented and the many shifts in regulation have made it worse," says Shaw. "However, the opening up of the US market should drive growth in the sector.''
Currently, Asia is the primary market for follow-on biologics, accounting for 34.1% of global sales, according to a new report by Markets & Markets on Biosimilars (2009–2014), but the US market is predicted to rise to the top spot once a regulatory pathway for follow-on biologics approval is passed (At press time, several proposals were routing through the US Congress). According to the report, the sector is poised to be worth $19.4 billion by 2014 globally, by which time the US would have overtaken Asia as the dominant market.
Several follow-on biologic companies such as Biocon, Dr. Reddy's Laboratories (Hyderabad), Reliance LifeSciences (Mumbai), the Indian operation of San doz (Mumbai), Teva (Mumbai), and Wockhardt (Mumbai), are chaffing at the bit at the shifts in regulation. These firms have been marketing their drugs in India, China, and Europe for several years. Europe, which incorporated a regulatory approval pathway for follow-on biologics in 2004, has approved nine products to date.
The scientific and regulatory experiences with these products suggests that these firms are poised to dominate the US market after legislation permitting approval and sale of follow-on biologics is completed. "We would certainly like to have a first-mover advantage in the USA, as soon as the country opens its market for biogenerics,'' adds Pankaj Patel, CEO of the Zydus Cadila Group (Ahmedabad).
Zydus is developing follow-on therapeutic proteins and new biological entities, including monoclonal antibodies (mAbs), at its research center in Ahmedabad. Patel added that it is becoming increasingly apparent that "only large, well-capitalized companies with sophisticated regulatory, marketing, and distribution capabilities will be able to compete in the US follow-on biologics market. Several Indian companies fit the bill.'' Zydus's current follow-on biologic portfolio includes ESAs, interferons, insulin, growth factors, pegylated proteins, and mAbs.
Maintaining a lead
By 2015, follow-on biologic erythropoietins are expected to emerge as the dominant type of drug product around the world and achieve sales of $6.1 billion; close behind will be recombinant non-glycosylated protein products, which currently account for 61% of the global follow-on biologics market, according to the Markets & Markets report. Together, these products would help the global sector grow to $11.5 billion in sales, by 2015, according to the report. Indian firms, who already market erythropoietin drugs, are clearly in an advantageous position (see Table I).
Table I: Select Indian pharmaceutical firms with follow-on biologics.
Indian companies are taking on new vaccine-development challenges as well to maintain their edge in the biopharmaceutical sector. Some novel homegrown products in late-stage development include a single or combination vaccine against locally relevant diseases such as Japanese encephalitis and anthrax, cholera, and meningitis, manufactured by biopharmaceutical companies Panacea Biotec, Biological E (Hyderabad), and Transgene Biotek (Medak District, Andhra Pradesh), respectively, and a vaccine against rotaviral diarrhea (Bharat Biotech International, Hyderabad). Novel products such as bacteriophages as antibacterial agents against multidrug resistant bacteria and lysostaphin, an anti-infective multidrug resistant to Staphylococcus aureus, are also being developed in India.
To maintain a leadership position in follow-on biologics, Indian pharmaceutical and biotechnology companies are forming new alliances with the government-funded Department of Biotechnology, publicly funded institutions, and global philanthropic institutions such as the PATH Malaria Vaccine Initiative (a grantee of the Bill & Melinda Gates Foundation,) and the Wellcome Trust in the United Kingdom. The potential for further growth in follow-on biologics is huge, and Indian firms are solidifying their share of the pie.
A. Nair is a freelance writer based in Mumbai.